Mortgage Rates Moved Higher Today

Mortgage rates moved higher today, but remained near the lowest levels in more than 2 months.  Friday's drop was uncharacteristically sharp and put rates in a position to break 7 month lows had today gone the other direction. 

This morning global equity markets improved, the US stock market early this morning before the open the DJIA was trading up 260 points and the other indexes also were higher. Recent attempts to improve the equity markets around the world since the beginning of the year have failed - the same was the case today. As the day went on the stock market lost most of the gains - not a big move today but it clearly shows that liquidation of stocks is continuing, and what I am hearing from others who are smarter in this field than myself, will continue. The entire global financial world is presently trading off the movement in oil prices.

The stock market will continue its volatility but the path is lowering economic grow. The DJIA is likely to fall another 1500 points before any serious rebound can be expected. The Fed is not going to increase the FF rate at its March meeting as was widely expected as little as three weeks ago. The Fed is trapped as are other central banks. Mortgage interest rates over the next two months will likely decline even further from today’s rates.  I do believe a new re-finance boom is coming. The 10yr note, once it breaks below 2.00% will run to 1.50%. All of this will likely occur by the end of March.

I loved this comment that there is a lot of grumbling now that oil prices are too low. Once oil bottoms and begins its long move higher there will be equal grumbling that increasing oil prices are dragging down economic growth. The world is in a trap, and how we get out remains a serious issue.

Home builder sentiment in the U.S. was steady in January this morning with the NAHB Housing Market Index remaining near the estimate, even though it did not meet expectations.  Tomorrow we will have January CPI, and December housing starts and permits.  The temperature here is falling outside and snow is building up on the car – I am out of here.

In summary, rates hung tough today, nearly unchanged from last week.  There was no domestic data of note released.  With rates as stable as they have been, I am not adverse to floating short term in hopes of capturing improved pricing, as long as borrowers' available funds and risk tolerance permit.  It would take a calamitous event for rates to drop much further in a short term, but you never know!